As a college student, your choice of credit cards may be limited to student cards that are easier to qualify for. But once you graduate, the door may open to a whole host of new and exciting credit card offers.
Unfortunately, many people end up sticking with the status quo and using a card they’ve had for a while — even if it’s not the best one for their current needs. If you’re graduating from college, it’s time to seriously consider whether applying for a new card is right for you.
Why it can make sense to get a new credit card as a college grad
Applying for a new credit card as a college grad could be a good move if you have access to cards that weren’t available to you as a student. There are many great credit cards that offer generous rewards and cardholder perks you’ll love, such as car rental insurance or airline lounge access.
If you’re able to qualify for a credit card that gives you benefits your current card doesn’t, then it may be well worth applying so you can take advantage of all the card has to offer.
New spending habits, new rewards
There’s also another reason why switching cards may make a lot of sense. Chances are good that your spending patterns will change as you enter a new phase of life. You may be spending more on life necessities now that you’re officially an adult — and your buying habits may change, for example you might spend more on groceries and gas but less on dining out.
Each credit card rewards various types of spending differently. Some cards provide bonus rewards, cash back, or miles for things like grocery store and gas purchases, and others provide extra rewards for spending at big box stores or certain online retailers.
It pays to ensure that the card you’re using regularly gives you the most bonus rewards for the types of purchases you make most often as a new grad. It can take some time to figure out what those are as you slowly make lifestyle changes, so it can be a smart move to monitor your spending for a while before choosing a new card.
Higher credit limit
Finally, applying for a new credit card as a college grad could make sense because you may be able to get a card offering a larger credit limit than the ones you had while you were in school. The higher your credit limit, the easier it is to maintain a low credit utilization ratio (which is the ratio of credit used vs. credit available). A lower ratio is better for your credit score.
Whichever card you pick, make sure you can consistently pay your credit card bills on time — especially if you’re going to get a card with a higher credit limit. But if you’re confident you can stay on top of your credit card bills — and find a card that’s a better match for your spending and offers you a higher credit limit — it may be worth applying once you’ve left your college life behind.